The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has directed the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to dissolve a disputed Host Community Development Trust within 48 hours, following concerns over its constitution, representation and consultation with affected oil-producing communities.
The directive was issued during an investigative hearing by the commission’s Investment Monitoring Committee into the operations of Sterling Oil Exploration and Energy Production Company (SEEPCO) and its compliance with the Host Community Development Trust provisions of the Petroleum Industry Act (PIA).
According to a statement issued on Friday by RMAFC’s Head of Information and Public Relations Unit, Maryam Umar-Yusuf, the commission raised concerns about the establishment and operation of the trust created for the affected host communities.
RMAFC demands action from NUPRC
Speaking at the hearing, RMAFC Chairman Mohammed Shehu reaffirmed the commission’s commitment to protecting the interests of communities affected by oil and gas activities.
Shehu described the investigation as an important national responsibility and said the commission would continue to strengthen its oversight of operators and institutions involved in the management of petroleum-related revenues and community benefits.
He stressed the importance of transparency and accountability, expressing confidence that the investigation would help restore trust in the petroleum sector and ensure host communities receive the benefits guaranteed to them under the law.
The hearing was led by Ekene Enefe, Chairman of the Investment Monitoring Committee and Federal Commissioner representing Anambra State.
Enefe conducted an extensive investigation into SEEPCO’s compliance with statutory requirements governing Host Community Development Trusts.
He said communities should no longer be expected to endure the environmental and social consequences of oil exploration without receiving corresponding development.
Addressing NUPRC officials during the hearing, Enefe said every institution within the petroleum value chain would be held accountable for carrying out its statutory responsibilities.
He subsequently issued the 48-hour ultimatum.
“We are going to give you 48 hours to dissolve that Host Community Development Trust.”
SEEPCO accused of failing to meet obligations
The committee also criticised SEEPCO for repeatedly failing to honour invitations to appear before it despite previous engagements.
Enefe further accused the company of failing to meet its obligations to the affected host communities.
He said RMAFC would formally communicate its demands to the company and give it an ultimatum to settle outstanding obligations owed to the communities.
The committee chairman added that the investigation would be concluded and its findings forwarded to the relevant authorities.
He maintained that RMAFC would continue to exercise its constitutional oversight powers without fear or favour.
NUPRC defends the disputed trust
The NUPRC delegation, led by its Director of Host Communities, Ufondu Ejiro, defended the establishment and implementation of the Host Community Development Trust.
Ejiro told the committee that the trust had been properly incorporated, funded and structured in accordance with the Petroleum Industry Act and the Host Community Development Regulations.
She said the regulator had processed documentation covering community consultations, governance structures, funding arrangements and Community Development Plans.
The NUPRC also presented records of statutory contributions made to the trust as evidence of its compliance with its regulatory responsibilities.
However, representatives of the affected communities disputed the regulator’s position.
Host communities challenge representation
Peter Chukwudi, counsel representing the affected communities, rejected the NUPRC’s submissions.
He argued that some of the individuals recognised as community representatives were not accepted by the communities themselves.
Chukwudi also alleged that adequate consultations had not taken place before the trust was constituted.
He questioned the level of development recorded in the affected communities despite years of oil production and urged RMAFC to conduct a thorough investigation into the grievances.
State government calls for greater transparency
The Anambra State Commissioner for Petroleum and Mineral Resources, Professor Charles Ofoegbu, called for stronger cooperation between the NUPRC and the state government.
He said better collaboration was necessary to verify legitimate community representation and monitor compliance with statutory obligations.
Ofoegbu also advocated greater transparency in the calculation of statutory contributions, operational expenditure and the implementation of community development projects.
He stressed that the state government had a responsibility to protect the interests of its oil-producing communities.
Other RMAFC commissioners also raised concerns during the hearing.
The Federal Commissioner representing Rivers State, Desmond Akawor, said there appeared to be a disconnect between the regulator and affected state governments.
He called for closer engagement between government agencies, operators and host communities to improve oversight.
The Federal Commissioner representing Kogi State, Abdulazeez Idris-King, questioned the effectiveness of the NUPRC’s verification process.
He argued that relying solely on documents submitted by petroleum operators might not be enough to establish whether genuine consultations with host communities had actually taken place.
Similarly, the Federal Commissioner representing Jigawa State, Hauwa Umar-Aliyu, urged regulators to maintain professionalism and impartiality.
She said public confidence would increase only when the interests of host communities were given the same attention as those of petroleum operators.
What the Host Community Development Trust means
The Host Community Development Trust was established under the Petroleum Industry Act 2021 to ensure that communities where oil and gas operations take place receive direct and sustainable benefits from petroleum activities.
Under the PIA, petroleum operators, known as settlors, are required to establish trusts for their host communities.
The law requires operators to contribute 3 per cent of their actual annual operating expenditure from the preceding year to the relevant Host Community Development Trust.
The funds are intended to support community development projects, improve relations between petroleum operators and host communities and promote peaceful coexistence in oil-producing areas.
The NUPRC is responsible for regulating key aspects of the trusts, including their incorporation, funding, governance and implementation of development programmes.
The framework was introduced against the backdrop of decades of grievances in Nigeria’s oil-producing communities over environmental degradation, inadequate development, revenue distribution and disputes with petroleum companies.
Investigation continues
The RMAFC hearing is part of the commission’s broader oversight efforts aimed at improving transparency and accountability in the management of national revenue assets and ensuring that host communities receive the benefits provided under Nigerian law.
The 48-hour directive to dissolve the disputed trust now places the NUPRC under pressure to address the concerns raised by RMAFC and the affected communities.
The outcome could also have wider implications for how Host Community Development Trusts are established, how communities are represented and how petroleum operators fulfil their obligations under the Petroleum Industry Act.
